Google Dials NCLAT Against INR 1,337.76 Cr CCI Penalty

Tech giant Google has approached the National Company Law Appellate Tribunal (NCLAT) to challenge the Competition Commission of India (CCI) penalty it received over anti-competitive business practices in the Android ecosystem.

A Google spokesperson was cited in a PTI report saying that the tech giant believes the CCI penalty is a significant setback for its Indian users and businesses who trust Android’s security features. The spokesperson also said that the move might raise the cost of Android-based smartphones in the country.

The CCI imposed a penalty worth INR 1,337.76 Cr on Google for allegedly abusing its dominant position in multiple market verticals around the Android ecosystem. CCI ordered Google to pay a combined total of INR 2,274 Cr in penalties in two separate cases concerning its alleged anti-competitive practices in India. The tech giant is reportedly seeking a stay on the massive penalty, the largest ever India’s competition watchdog has ever handed out.

Google said that the Android ecosystem has greatly benefitted Indian users, developers and OEMs, powering India’s digital transformation. “We look forward to making our case in NCLAT and remain committed to users and partners,” the company spokesperson added.

According to the sources cited in the report, Google believes that CCI failed to appreciate the evidence from OEMs, developers and users that shows that Android’s open business ecosystem supports competition for the benefit of all stakeholders. 

The tech major also believes that the NCLAT would take account of the evidence on record and the contributions Android has made to the progress of India’s mobile ecosystem. Google sources also claim that the CCI decision on some aspects might expose Indian users to security risks and make Android devices less functional and safe.

The competition watchdog imposed the penalty for forcing OEMs to install Google Mobile Suite (GMS) on each Android mobile device, which was adjudged to be an abuse of dominance by the CCI. 

The competition watchdog investigated five separate markets, including,

• Licensable OS for smart mobile devices in India
• App stores market for Android in India
• General web search services in India
• Non-OS-specific mobile web browsers in India
• Online video hosting platforms (OVHPs) in India.

The competition watchdog noted that in all the markets, Google deliberately moved to consolidate its position and suppress competition, which led to the massive penalty of INR 1,337.76 Cr.

Consequently, the CCI also issued a cease-and-desist order against Google, ordering it to stop engaging in anti-competitive activities. 

Some of the other orders included permitting users to install other apps via sideloading, allowing users to uninstall pre-installed Google apps and allowing app store developers to distribute their app stores via the Play Store, among others. 

Side loading can be a security risk as the apps downloaded from the internet can – and in many cases do – contain spyware, malware or ransomware that can give access to the user’s device to a malicious entity.

The CCI also ordered Google to pay INR 936.44 Cr in a different case involving Google’s allegedly anti-competitive Play Store policies.

Note: We at Inc42 take our ethics very seriously. More information about it can be found here.